Question

Distinguish between low and high incomes and low and high economic growth rates. What key features are present in an economy when incomes are high or fast growing and absent when incomes are low and stagnating or growing slowly? Provide an example of an economy with a low income and slow growth rate, a low income and rapid growth rate, and a high income with sustained growth over many decades.

Answer 1

A high income country has the a very large GDP and a low income country should have a small amount of GDP. The gdp is the total money value of all final goods and services produced with in the year. In the low income countries the real per capita income will be very low and high in the developed country. The low income earners has got less money to spend on the goods and services and the exact opposite for the high income earners. The difference is in the amount of money they hold, the low income country holds a relatively small amount money compare to a high income country. The low and high economic growth rates depends on the pace of ecomic activity in the country, it is depended upon the economic factors available to them. A low economic growth is caharacterised by a low pace in the country's economic activity, that is production, distribution, consumption etc... Similarly a high economic growth is characterised by a high pace in the economic activity. The economic growth is determine by the increase in the country's total output, a high increase shows the high economic growth and vice versa.

Low income county with a slow growth rate: Bermuda, growth rate -2.5%(2013)

Low income country with a rapid growth rate: Rwanda, GDP- 8.918 billion, growth rate: 8.9%(2015), 6.2% in 2017

A high income country with sustained growth: Turkey,